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Valuing a Privately Owned Business

When buying or selling a private business there is no public exchange, like the New York Stock Exchange, to help determine what the equity of the business is worth. What the buyer is really purchasing is a potential future income stream. Valuing something as speculative and (seemingly) abstract as the future income stream (or cash flow) of a company is no easy task. We found this blog entry by a valuation expert which explains some of the basic principles of valuing privately owned businesses.
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